Side Hustle Tax in Australia: What You Need to Know (2026 Guide)

There is no de minimis threshold below which side hustle income is tax-free in Australia. Whether you earned $500 or $50,000 from freelancing, selling on eBay, driving for a rideshare platform, or completing tasks on Airtasker, that income must be declared in your tax return.

The ATO has data-matching programs with major platforms including Uber, Airbnb, eBay, Etsy, and Airtasker. This means they often know about your income before you tell them - and discrepancies trigger audits.

ABN requirements depend on whether your activity constitutes a 'business' - and the answer is often yes:

• Rideshare and food delivery (Uber, DoorDash, Menulog): You are operating as a contractor and must have an ABN. You must also register for GST if your rideshare income exceeds $75,000 annually - or immediately for rideshare (the GST threshold doesn't apply to taxi/rideshare services).
• Freelancing and consulting: If you're providing services systematically for profit (not just occasionally), you're likely running a business and should have an ABN.
• Selling goods online (Etsy, eBay, Facebook Marketplace): Occasional sales of personal items (second-hand goods at a loss) typically aren't business income. Systematic buying and reselling for profit is.
• Tutoring, photography, dog walking, lawn mowing: If you're advertising, charging market rates, and intending to make a profit, you're likely carrying on a business.
• Getting an ABN is free and takes minutes at abr.gov.au. Having one doesn't mean you automatically owe more tax - it just enables proper reporting.

Side hustle income is added to your total taxable income and taxed at your marginal rate. If you have a full-time job earning $80,000 and a side hustle earning $20,000, your total taxable income is $100,000 - and your side hustle income is taxed at the marginal rate that applies to the $80,000–$100,000 band.

This is why many people get a tax bill surprise in July - their employer withheld the right amount of tax for their salary, but didn't withhold anything for the side hustle income. The solution is to set aside a portion of every side hustle payment as you earn it.

A practical rule: set aside 25–30% of gross side hustle income for tax if you're employed full-time. This accounts for your marginal rate plus the Medicare Levy. If your total income puts you in a higher bracket, increase this to 35–40%. Keep this money in a separate high-interest savings account - it earns interest while you hold it, and is available when your tax return is due.

The good news: if you're running a business, you can deduct legitimate business expenses against that income. Common deductions include:

• Vehicle expenses: If you use your car for the business (Uber, deliveries, client visits), you can claim vehicle costs either using the cents-per-kilometre method (88c/km in 2024-25, up to 5,000km) or the logbook method for higher deductions.
• Equipment and tools: Laptop, phone, camera, or any equipment used for the side hustle. If also used personally, you can only claim the business-use proportion.
• Phone and internet: The business-use proportion of your phone and internet plan.
• Platform fees: Fees paid to Airtasker, Etsy, eBay, Upwork, or other platforms are deductible.
• Marketing and advertising: Costs for promoting your side hustle - social media ads, business cards, website hosting.
• Home office expenses: If you work from home for the side hustle, you can claim a portion of home running costs (electricity, internet) using the ATO's fixed rate or actual cost method.
• Professional development: Courses or subscriptions directly related to your side hustle skills.
• Accounting fees: The cost of your tax agent or accountant.

Keep all receipts - the ATO requires substantiation for claims. A simple folder (digital or physical) organised by month is sufficient.

You must register for GST if your business turnover exceeds $75,000 per year - except for rideshare/taxi services where registration is required from your first dollar of income.

Once registered, you collect 10% GST on your sales and can claim back GST on business purchases. You must lodge Business Activity Statements (BAS) quarterly or annually. If you're earning below $75,000 from non-rideshare activities, GST registration is optional - but it can be worth registering if you have significant GST-paid business expenses to claim back.

Good record-keeping isn't optional - it's your protection in an audit:

• Keep records for 5 years from the date you lodge the relevant tax return
• Record all income: bank statements, platform payment reports, invoices issued
• Record all expenses: receipts, invoices, bank statements showing payments
• Keep a logbook if you're claiming vehicle expenses above 5,000 km
• Use accounting software (Xero, MYOB, QuickBooks) or even a well-maintained spreadsheet for systematic record-keeping

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